Print Tax Checks

Overview

ProPay automatically generates tax checks when processing payroll based on each employer's tax deposit frequency and current tax liability. Tax checks are printed to various government agencies for federal, state, and local tax payments.

When Tax Checks Are Generated

Automatic Generation During Payroll

Tax checks are created automatically when you print employee paychecks, if taxes are due. Whether taxes are due depends on two factors:

A) Tax Deposit Frequency Defined in Employer Setup for each tax type:

• Monthly depositor
• Semi-weekly depositor
• Quarterly depositor
• Next-day depositor (for large accumulations)

B) Balance Due The difference between Accrued liability and the sum of all tax payments for the current quarter.

Tax Payment Evaluation Process

Each time you print employee checks:

1. ProPay evaluates the employer's tax liability for each tax type
2. Compares current liability to the tax deposit frequency requirement
3. Determines if payment is due
4. If payment is due, creates a tax check entry
5. Prints the tax check with the appropriate payment information

Types of Tax Checks

Federal Tax Checks

Form 941 Taxes

• Federal Income Tax Withholding
• Social Security (OASDI) employer and employee portions
• Medicare employer and employee portions
• Additional Medicare Tax (if applicable)

Form 940 Taxes

• Federal Unemployment Tax (FUTA)
• Typically paid quarterly if liability exceeds $500
• Annual payment if total liability is $500 or less

State Tax Checks

State Withholding Tax (STWT)

• State income tax withheld from employee wages
• Payment frequency varies by state and employer size

State Unemployment Insurance (SUI)

• Employer-paid unemployment insurance
• Typically paid quarterly
• Rates and wage bases vary by state

Local Tax Checks

Local Earned Income Tax

• Municipal or county income taxes
• Common in Pennsylvania, Ohio, and other states
• Payment frequency varies by locality

Other Local Taxes

• Occupational privilege tax
• School district tax
• Transit district tax
• Special local assessments

Tax Check Components

Check Stub Information

Tax checks include detailed information on the check stub:

Payment Information:

• Employer name and Federal ID
• Tax period covered
• Payment due date
• Tax type (941, 940, STWT, SUI, LOCAL)

Tax Breakdown:

• Gross wages for the period
• Tax calculation details
• Previous payments in the quarter
• Current payment amount

Instructions:

• Where to mail the check
• Which form or coupon to include
• Due date reminder

Payment Coupons

Some state and local tax agencies still require payment coupons with checks:

• State-specific coupons — varies by state
• Local tax coupons — for municipalities requiring them

Note: Federal tax deposits must be made electronically through EFTPS. The paper Federal Tax Deposit Coupon (Form 8109) was discontinued in 2011. Most state agencies also now accept or require electronic payment.

Printing Tax Checks

During Regular Payroll Processing

Tax checks print automatically during the normal paycheck printing process:

1. Process employee paychecks as usual
2. Click Print Paychecks
3. Select employees to include
4. Click Continue
5. Print employee checks
6. If taxes are due: ProPay prompts "Do you want to print Tax checks?"
7. Click Yes to print tax checks
8. Tax checks print to the selected printer

Printing Tax Checks Only (No Employee Checks)

To print tax checks without printing employee paychecks:

1. Click Paychecks
2. Select Print Checks for "Selected" employees
3. Enter the pay date
4. Click Continue
5. Do not select any employees
6. Click Continue again
7. The program prompts "Do you want to print Tax checks?"
8. Click Yes
9. Tax checks print

This method is useful for:

• Re-printing tax checks after an error
• Generating year-end adjustments (e.g., Form 940 balance due)
• Creating tax payments after manual adjustments

Tax Check Numbering

Check Number Sequence

Tax checks use a separate check number sequence from employee paychecks:

Configuration Options:

• Same check stock as employee checks (consecutive numbering)
• Separate check stock for tax checks (separate numbering sequence)
• Pre-numbered checks
• Computer-generated check numbers

Setting Check Numbers

Configure in Employer Setup:

1. Click Client Functions
2. Select Edit Client
3. Click Employer Setup - Page 4
4. Enter:
• Next Check Number - For employee checks
• Next Tax Check Number - For tax checks (if using separate sequence)

Re-printing Tax Checks

When to Re-Print

Re-print tax checks when:

• Check was damaged or printed incorrectly
• Check was lost in the mail
• Wrong amount was printed
• Check stock jammed during printing

Re-Print Procedure

1. Delete the incorrect payment from the Tax Deposits file:
• Click Taxes
• Select List/Update Tax Deposits File
• Find the payment to delete
• Delete the entry
1. If the check was printed, void it in your records
2. Regenerate the payment:
• Go to Paychecks
• Select Print Checks for "Selected" employees
• Use the same pay date as the deleted payment
• Do not select any employees
• Click Continue
1. When prompted to print Tax checks, click Yes
2. The new check prints with the corrected information

Voiding Tax Checks

If a tax check needs to be voided:

1. Do not delete the entry from Tax Deposits file immediately
2. Mark the check as void in your check register
3. Create an adjustment entry if needed
4. Delete the original entry
5. Regenerate the corrected payment

Tax Check Due Dates

Federal Tax Due Dates

Form 941 (Quarterly) - Monthly Depositors:

• Due by the 15th of the following month
• Example: January payroll taxes due by February 15

Form 941 (Quarterly) - Semi-Weekly Depositors:

• Wednesday deadline for Saturday, Sunday, Monday paydays
• Friday deadline for Tuesday, Wednesday, Thursday, Friday paydays

Form 940 (Annual) - FUTA:

• Quarterly deposits if liability exceeds $500
• Due by the last day of the month following quarter end
• Annual payment with Form 940 if total liability is $500 or less

State Tax Due Dates

State due dates vary by state. Common schedules:

Monthly State Withholding:

• Due by the 15th of the following month

Quarterly State Unemployment:

• Due by the last day of the month following quarter end
• Q1: April 30
• Q2: July 31
• Q3: October 31
• Q4: January 31

Semi-Weekly or Next-Day:

• Similar to federal schedules for large employers

Local Tax Due Dates

Local tax due dates vary widely by jurisdiction. Check with each locality for specific requirements.

Tax Check Reconciliation

Quarterly Reconciliation

At the end of each quarter:

1. Review the Tax Liability screen
2. Verify all required tax payments were made
3. Ensure the Balance for each tax type is zero or reflects expected carryover
4. Print the Tax Deposits Listing report
5. Compare to bank statements and agency records

Year-End Reconciliation

Before filing annual returns (Form 940, W-2s, state annual reports):

1. Review all tax payments for the year
2. Verify total payments match total liabilities
3. Check for any outstanding amounts
4. Generate any final tax checks needed
5. Ensure all checks have cleared the bank

Common Tax Check Issues

Issue: Tax Check Amount Doesn't Match Expected Amount

Cause: ProPay calculates tax payments based on the entire quarter's liability, not just the current pay date.

Solution:

1. Review the Tax Liability screen
2. Check for prior manual adjustments or deletions
3. Verify the calculation includes all payrolls in the quarter
4. Accept the amount if it matches quarterly calculation
5. Investigate if there's a significant discrepancy

Issue: No Tax Check Generated When Expected

Possible Causes:

• Tax deposit frequency set incorrectly
• Liability hasn't reached the threshold for payment
• Tax payment method set to EFTPS instead of paper checks
• Balance was already paid in a prior check

Solution:

1. Check Employer Setup for tax deposit frequency
2. Review Tax Liability screen
3. Verify payment method configuration
4. Check Tax Deposits file for recent payments

Issue: Tax Check Printed to Wrong Agency

Cause: Employer Setup has incorrect agency information or tax type is assigned to wrong jurisdiction.

Solution:

1. Review Employer Setup - Tax Information
2. Verify all tax agencies and addresses
3. Delete the incorrect check from Tax Deposits file
4. Update employer setup
5. Regenerate the check

Issue: Duplicate Tax Checks Printed

Cause: Tax check was regenerated without deleting the original entry.

Solution:

1. Review Tax Deposits file
2. Identify duplicate entries
3. Delete the duplicate
4. Void one of the printed checks
5. Keep the other for payment or void both and regenerate if needed

Tax Check Mailing

Federal Tax Checks

Form 941 Deposits: Mail to the address specified in Form 941 instructions based on your state. Addresses vary depending on whether you're including a payment.

Form 940 Payments: Mail to the address specified in Form 940 instructions for your state.

Important: Most federal tax payments should now be made electronically through EFTPS. Check with the IRS for current requirements.

State Tax Checks

Mail state tax checks to the address specified by your state tax agency. This information is typically found on:

• State tax payment coupons
• State Department of Revenue website
• Employer tax guides

Local Tax Checks

Mail local tax checks to the specific municipality or tax collection agency. Addresses vary by jurisdiction.

Transitioning From Checks to Electronic Payments

Why Transition to Electronic Payments

Benefits:

• Faster processing
• Proof of payment
• No mail delays
• Reduced printing costs
• Lower risk of lost checks
• Some agencies now require electronic payment

Federal Electronic Payments (EFTPS)

To transition from tax checks to EFTPS:

1. Enroll in EFTPS at www.eftps.gov
2. Receive enrollment confirmation and PIN
3. Update ProPay Employer Setup:
• Click Employer Setup - Page 4
• Change tax payment method to EFTPS
• Enter EFTPS enrollment information
1. Tax payments will now be generated electronically instead of as checks

State Electronic Payments

Many states offer electronic payment options:

1. Enroll with your state tax agency
2. Receive login credentials
3. Update Employer Setup for electronic state payments
4. ProPay generates electronic payment files
5. Upload files to state website or transmit via ACH

Tax Check Printing Best Practices

Pre-Printing Checklist

Before printing tax checks:

1. Review Tax Liability screen - Verify amounts are correct
2. Check printer setup - Ensure check stock is loaded properly
3. Verify check numbers - Confirm next check number is correct
4. Review due dates - Ensure checks will be mailed on time
5. Check agency information - Verify addresses are current

Post-Printing Checklist

After printing tax checks:

1. Review printed checks - Verify all information is correct
2. Sign checks - If required by bank
3. Attach coupons - Include required payment coupons
4. Record in check register - Track in your accounting system
5. Mail promptly - Ensure checks arrive by due date
6. Keep copies - Retain for your records and client files

Security Measures

Protect tax checks:

• Store blank check stock securely
• Limit access to check printing
• Use password protection for Tax Deposits file
• Reconcile check numbers regularly
• Investigate missing check numbers immediately

Reports for Tax Checks

Payroll Summary Report

Shows:

• Tax checks generated during payroll
• Due dates
• Total tax payments for each employer

Tax Deposits Listing

Shows:

• All tax payments for the year
• Check numbers
• Payment dates and due dates
• Tax types and amounts

Tax Liability Report

Shows:

• Accrued liability
• Paid amounts
• Balance due
• Helps verify all required payments were made

Alternatives to Paper Tax Checks

Electronic Payment Options

EFTPS (Federal):

• Electronic Federal Tax Payment System
• Free service from the U.S. Treasury
• Handles all federal tax deposits

State Electronic Payments:

• Most states offer electronic payment portals
• Some states require electronic payment for large employers
• May use ACH debit or credit

ACH Tax Impounds:

• For Payroll Service Bureaus
• Funds debited from employer account
• Held in escrow by processor
• Paid to agencies electronically

Benefits of Electronic Payments

• No check stock needed - Eliminate printing costs
• Faster confirmation - Immediate confirmation number
• No mail delays - Direct transmission to agency
• Better tracking - Electronic records of all payments
• Required for some - Some agencies mandate electronic payment
• Integration - Seamless integration with ProPay

Additional Resources

• IRS Publication 15 (Circular E) - Employer's Tax Guide
• EFTPS enrollment information - www.eftps.gov
• State Department of Revenue websites
• Employer Setup configuration guide
• Tax Deposits file management procedures

Related Topics

• Federal Taxes / 941 Processing
• 940 Annual Processing
• State Taxes Overview
• Tax Deposits / Agency Checks
• EFTPS Batch Provider
• Transmitting Tax Impounds
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